No one knew what to expect when the straight talking, controversial President of the Philippines Rodrigo Duterte flew into China with an entourage of 400 businessmen lining up to sign billions of dollars of deals in his wake. Riding the wave of changing expectations between the two countries, the Philippine business community enjoyed the show as US diplomats and their supporters squirmed in their seats while the wheels turned in a new age of diplomacy between the Pearl of the Orient and the Middle Kingdom.Find the more Shanghai business news from SHINE.
Coming off a tough drug war and under scrutiny by the world press for his uncompromising attitude towards everyone from US President Obama to the head of the Catholic Church, Duterte was in fighting form when he headed to China. Backed by public opinion and racking up record numbers in approval ratings polls, the Duterte Administration was in the spotlight to make a difference. With the regime’s focus on poverty alleviation, the need to generate economic growth and provide jobs is essential to the Duterte Dream and China is a critical player if this scenario is to be fulfilled.It is not surprising that Duterte wanted to bring China onside to support his vision of a new Philippines. What is surprising is that Duterte is willing to jettison America as part of the deal. Any Filipino schoolchild can quote General Douglas MacArthur’s vow to return to defeat the Japanese, and the image of the great soldier striding through the surf of a Philippine beach with pipe in hand to make good on his promise is the stuff of Hollywood legends. Never mind that the nation was a colony of the US for almost half a century up to 1946. Yet, Duterte was willing to move away from the US sphere of influence that is evident to this day to push an economic policy more reliant on the Silk Road vision. The result of the Duterte swing from the US to China can be measured in new jobs and funding. If all goes as planned, the Philippine Department of Trade & Industry believes two million jobs will be generated by industry, not to mention the opportunity to add even more tourism related jobs with the lifting of a travel advisory cautioning Chinese tourists traveling to the Philippines. Much focus has been placed on the estimated US$24 billion in investment and credit facilities promised by Chinese enterprises and government sources. Some US$15 billion accounts for company-to-company deals from agriculture to energy, tourism to manufacturing, with credit made available to businesses for development projects and infrastructure. Though a break with the US will have economic repercussions, and may in fact not take place to the same degree with the election of Trump, in Duterte’s calculation the scales are tipping in China’s favor when all is said and done.
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June 2018
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